Which of the Following Statements Is False

question 83

Multiple Choice

Which of the following statements is false?

• A)A dollar received one year from now will be worth more than a dollar received today.
• B)A dollar received one year from now will be worth more than a dollar received two years from now.
• C)Compounding essentially means earning interest on interest on an initial balance.
• D)Perpetuities pay an equal payment forever.

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Definitions:

Composite Rate

A single interest rate that reflects the combination of rates applied to several different financial transactions or loans.

Residual Value

The anticipated final value of an asset after its period of utility has ended.

Sum-Of-The-Years'-Digits

A depreciation method that accelerates the expense recognition, based on a descending fraction of the sum of the year digits.